Hong Kong stocks trimmed early gains and closed 1.37 percent higher on Thursday in dramatic trading as investors took profits on huge rally in early trading following China's massive interest rate cuts.
Boosted by China's surprisingly massive interest rate cuts on Wednesday, the benchmark Hang Seng Index soared 532 points, or 3. 98 percent, to open at 13,901.45 and once surged 561.46 points, or 4.2 percent, to the day's highest 13,930.91 in the morning session.
Investors chose to take profits on huge rally in early trading when trading was resumed in the afternoon session and once reversed the market's gains to negative territory by pulling down the index as much as 36.52 points, or 0.27 percent, to the day's lowest 13,332.93 near closing.
The market managed to close at positive territory, up 182.61 points, or 1.37 percent, to finish at 13,552.06.
The benchmark Hang Seng Index jumped 532 points, or 3.98 percent, to open at 13,901.45 and once soared near the 14,000 mark half an hour before the morning break, propelled by huge gains of property and banking companies registered in the Chinese mainland.
Turnover rose to 50.23 billion HK dollars (6.48 billion U.S. dollars) from Wednesday's 41.68 billion HK dollars (5.38 billion U. S. dollars).
The People's Bank of China, or the country's central bank, took the boldest step in a decade Wednesday to lower the benchmark one-year lending rate by 1.08 percent to 5.58 percent while slashing the one-year deposit rate by the same amount to 2.52 percent.
Meanwhile, the central bank would also lower the reserve requirements by 1 percent for the large banks and by 2 percent for the smaller and medium-sized banks as of Dec. 5, releasing hundreds of billions of yuan into the market.
Among 42 Hang Seng Index components, advancers greatly outnumbered declining stocks 31 to 11.
HSBC, the largest lender in Hong Kong that accounts for the largest weighting of the Hang Seng Index, pared early gains by moving up 0.8 percent to 81.65 HK dollars.
Another market heavyweight China Mobile, the market's largest company measured by capitalization or the country's biggest telecommunication operator, advanced 1.39 percent to 69.5 HK dollars after weakening from intra-day high of 71.7 HK dollars.
The Hong Kong Exchanges and Clearing Ltd. the market's sole operator, rose 4.63 percent to 59.9 HK dollars.
Property companies in Hong Kong narrowed gains but still closed at positive territory after China's rate cuts. Sung Hung Kai Property, the city's largest housing company, edged up 0.44 percent to 57.5 HK dollars. Cheung Kong was up 0.21 percent to 70.15 HK dollars. Henderson Land added 0.19 percent to 26.25 HK dollars. New World Development advanced 4.58 percent to 5.94 HK dollars. Sino Land rose 2.21 percent to 5.55 HK dollars. Hang Lungrose 4.13 percent to 15.62 HK dollars.
The China Enterprise Index, or H-shares reflecting the performance of 42 companies registered in the Chinese mainland, rose 186.72 points, or 2.69 percent, to 7,120.83.
China's energy companies were all higher. PetroChina, the country's largest oil producer, rallied 4.17 percent to 6.25 HK dollars. Sinopec, Asia's largest refiner, gained 3.74 percent to 4. 99 HK dollars. CNOOC, China's largest offshore oil producer, rose 2.96 percent to 5.91 HK dollars.
China's banks and insurers listed in Hong Kong were all higher after the central bank's interest rate cuts. ICBC, China's largest lender, added 1.6 percent to 3.82 HK dollars. Bank of China, the second largest bank in the country, advanced 2.17 percent to 2.35 HK dollars. China Construction Bank, the country's third banking giant, went up 2.44 percent to 4.2 HK dollars. Bank of Communications added 3.62 percent to 4.87 HK dollars. China Merchants Bank moved up 0.98 percent to 12.36 HK dollars. China Life, the country's largest insurance company, edged up 0.49 percent to 20.5 HK dollars after the company said it was considering to increase its investment in stock markets. Ping An also moved 0.49 percent to 31 HK dollars.
Property companies in China rose across the board as the central bank's rate cuts were meant to be good for the industry. China Overseas once soared more than 10 percent before gaining 7. 58 percent to 9.79 HK dollars. R&F Properties surged 12.2 percent to 4.14 HK dollars after once rocketing more than 23 percent. KWG Property rose 8.15 percent to 1.46 HK dollars. Agile Property went up 7.14 percent to 2.7 HK dollars. Hopson Development soared 14 percent to 2.69 HK dollars. Greentown China went up 4.8 percent to2.4 HK dollars. (7.75 HK dollars = 1 U.S. dollar)
Source: Xinhua
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